EMC Reportedly Acquiring Online Backup Startup Mozy for $76 Million

9/24/07Follow @wroush

As broadband Internet connectivity spreads, the data pipes into homes and small businesses are becoming wide enough to regularly send large amounts of data to the cloud of servers on the Internet, making online data backup a real business. The niche has attracted a growing list of startups—with the usual selection of funny names, such as ElephantDrive, eSnips, and GoDaddy—with subscription-based services that make it possible to think of the Internet as a giant external hard drive for your home or office PC. Now it appears that local corporate-data-storage giant EMC (NYSE: EMC) wants a piece of the consumer online storage pie. According to a report on tech blog TechCrunch yesterday, EMC is paying an eye-opening $76 million for Mozy, the online backup service owned by Berkeley Data Systems of American Fork, UT.

With Mozy, as with its competitors, users download a small desktop application that lives on their Windows or Mac hard drive, monitoring selected folders or types of files and uploading copies to Mozy’s servers automatically at scheduled times. If disaster strikes, users can reconstitute their data by downloading it from Mozy. The company offers three levels of service: “MozyHome Free,” up to 2 gigabytes of backup space at no charge; “MozyHome,” which allows unlimited personal, non-commercial storage for a flat $4.95 per month; and “MozyPro,” with encrypted storage and advanced multi-user account features, for $3.95 per computer per month plus $0.50 per gigabyte of data stored per month.

Berkeley Data Systems said in April that it had more than180,000 customers. The company was founded in 2005 with a $2 million Series A venture backing from Wasatch Partners, Tim Draper of Draper, Fisher, Jurvetson, and Drew Major, the co-founder of Novell. The company is led by Joshua Coates, a veteran of Bay Area parallel storage systems company Scale 8, which shut down in 2003, and the Internet Archive, Brewster Kahle’s San Francisco-based non-profit project to save periodic snapshots of the entire Internet.

If the acquisition rumors are true, Mozy could help to round out EMC’s storage business, which has traditionally focused on selling expensive on-premises data appliances to corporate customers. EMC declined to provide details about the rumored deal. “As is customary with matters of rumor and speculation, particularly around potential M&A activity, we do not comment,” said EMC corporate public relations officer Patrick Cooley. EMC shares were up more than 6 percent in morning trading today, largely due to improved ratings of the company from Citigroup and Bear Stearns.

I also reached Berkeley Data Systems public relations manager Devin Knighton, who took a similar line, saying the company had “no comment on any rumors or speculation.” But Knighton added that a statement from the company would be forthcoming “soon.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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